Question

You invest $10,000 in an account with an APR of 2.75% monthly compounding. Find the accumulated balance in the account after 5 years.

Answer 1

You invest $10,000 in an account with an APR of 2.75% monthly compounding. Find the accumulated balance in the account after 5 years.

we know that

The compound interest formula is equal to

`A=P(1+(r)/(n))^(nt)`

`A=P(1+(r)/(n))^(nt)`

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest in decimal

t is Number of Time Periods

n is the number of times interest is compounded per year

in this problem we have

P=$10,000

r=2.75%=2.75/100=0.0275

t=5 years

n=12

substitute in the formula

`A=10,000(1+(0.0275)/(12))^((5\cdot12))`
`A=\$11,472.21`

answer is $11,472.21